PERSONAL injury firm Claims Direct outlined plans for its recovery today at the first annual meeting since its much-publicised change of ownership.

Newly appointed chief executive Ronnie Henderson told shareholders there were a number of challenges that would be addressed immediately.

These included returning the firm to profitability and repairing relationships with customers, partners, City institutions and the media.

First of all, however, Mr Henderson said Claims Direct would work on settling the litigation between itself and its franchisees by working out new contracts.

He said: "Litigation, by its very nature, is both costly and confrontational and is not conducive to a negotiated settlement, so every effort is being made to ensure we return as quickly as possible to a harmonious business relationship."

Over recent months, Claims Direct has been faced with a barrage of problems, including litigation, a collapsing share price, adverse publicity and a Department of Trade and Industry investigation.

Mr Henderson, who has worked in the insurance industry for more than 30 years, told shareholders: "I find myself in an unusual, if not an unique situation.

"Claims Direct was listed on the London Stock Exchange just 14 months ago and in that short period, its business model has collapsed and in its year to March 31 2001 a profit expectation of #20 million has turned to a loss of #20 million."

Although Mr Henderson pledged to make "renewed efforts" to return the group to profitability, he added that one option for the future of the group was merger.

He said discussions that could see Claims Line - a rival in which Claims Direct shareholder Simon Ware-Lane holds a substantial stake - merge with the firm were continuing.

He added: "Should this be concluded, it will give the company a choice of two brands and two business models. Early indications are positive and due diligence should be concluded in a few weeks."

Claims Direct was taken over in August by founders Tony Sullman and Colin Poole after a #19.4 million hostile battle.

They then quit after selling their controlling shares to private investor Simon Ware-Lane.